[ulricemma]

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Our reserves are SEVERELY underfunded, as we recently found out through a study. Our residents are by no means rich and some even struggle with finances. We must now raise over $70K to meet our reserve funding requirement. Have other associations encountered such a problem? What can we do to meet our reserve requirement without charging an exorbitant assessment?

[cascascassie]

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Unfortunately, if you want to meet you reserve requirement, you have no other choice but to levy a special assessment or raise dues by a significant amount. Homeowners associations secure their funding through homeowner dues and assessments. There’s really nowhere else you can get the money from realistically. A bank loan would solve your problem temporarily, but then you would have the loan to pay off. That would still require you to charge a special assessment or raise dues. I suppose you could try fundraising alternatives, but who else would you get those funds from? Again, it’s the homeowners. Sorry to say it, but you’re out of luck here.

[ulricemma]

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I was hoping for a different answer but I guess I knew all along that I couldn’t expect anything else. Thanks anyway.

[damsme29]

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Your reserve study should have come with a funding plan that tells you how much you need to put into your reserve account every year. You don’t have to meet it all in one go if your components still have a long useful life.

[ulricemma]

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That was my understanding as well. Unfortunately, we are a pretty old association with a lot of outdated components that are way past their prime. We only recently decided to get a reserve study done (our reserves were not really a priority until it became apparent that they were necessary). I suppose it is the association’s fault for not paying attention to this sooner. I just find it unfair that we homeowners are now left to pick up the pieces because past officers did not do their job well.

[damsme29]

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That sucks. I hope you have competent board members now.

[ulricemma]

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We are not the best but we are trying.

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